Pension over-promises need renegotiating: Hubbard

Glenn Hubbard, campaign adviser to Mitt Romney's 2012 presidential campaign, told CNBC's "Squawk Box" Monday that state and local governments, like Detroit, have over-promised and need to re-calibrate expectations.

Many state and local governments have too much debt and "too generous public pensions," said Glenn Hubbard, the Columbia Business School dean who advised Mitt Romney's 2012 presidential campaign and served as economic adviser to George W. Bush.

"There are a lot of social promises here," Hubbard noted. "One is to taxpayers about services, one is to retirees and employees, and the other is to bond holders."

"When we promise more than we can deliver," he argued, "we have to renegotiate. And that's what's got to happen."

"We need a national conversation on how to fix this."-Glenn Hubbard, Dean, Columbia Business School

Going forward, Hubbard said there's a role for the federal government to play in helping to prevent states and localities from denying fiscal realities. "At the federal level, we need policies that encourage state and local governments to move to reasonable accountings, so you don't lie about the future."